Reducing waste
and non value added tasks within the supply chain is a great way
of optimizing the Supply Chain.

Firstly to define waste we’ll take a look at the Seven Wastes.
This is a well established path in segregating the types of
waste within an organization - let’s take a look at how they can
apply to supply chain.

1.
OverproductionThis may take many forms from typically including producing
too much documentation from quotations, requisitions,
purchase orders. Overproduction can be characterized as
producing too much of “a product” from one process step to
another - with the recipient process not requiring as much
as was provided.

2. TransportationTypically characterized by over complex logistics routes and
distance between warehouses and end users.

3. WaitingHigh lead times can be a significant problem within supply chains
- causing customer dissatisfaction and work stop in
production environments - reducing lead times can result in
both financial and efficiency benefits.

4. InventoryToo much inventory is a common problem for organizations
-ensuring that the right level of stock is available to meet
requirements is a common supply chain task however overstocking
does not utilize company cash effectively and requires
additional overhead to resource.

5. MotionEnsuring supply chain processes are optimized for the
business environment can often be overlooked, poor planning
of organizational layouts can be frustrating for the
employees and dramatically reduce efficiency for example
ensuring put away locations in warehouse environments are
conveniently located, ensuring that workspaces are designed
with ergonomics in mind.

6. Over processingReducing process steps to a minimum is required to reduce over
processing which can rear it’s head in many forms - complex
controls and authorizations are common areas for over
processing.

7. DefectsFinally processes that require rework due to defects are
a common cause of concern - for example Suppliers
requiring more information due to poor technical
specifications - incorrect order quantities, or
quality issues for products received in the warehouse
are all common forms of defects. Supply chain
improvement plans are often constructed to target all or a
mixture of the above with a view of resources required to
deliver the process output.

Such improvement programs are
often referred to as “lean” or “leaning” and were
popularized by activities from the Toyota organization.
Research by the Canadian Logistics Industry have shown that
of the wastes typically challenges are met in improving
supplier lead time, improving forecasting and planning to
improve stock requirement accuracy (and therefore reduce
inventory) and improve Vendor Reliability (affecting both
lead time and quality of product.)

Waste reduction is a key step in improving efficiency and over
the past 15 years it has become a key part of the supply chain
executives toolkit - and has the ability to impact both an
organizations bottom line and the satisfaction of the customer.